Ontario First-Time Buyer Incentives: Tax Breaks and Savings

If you're a first-time buyer in Ontario, there are three incentives on the table right now that I think you need to understand before you shop for a home. Specific programs with specific numbers attached. Let me walk through them.

Land Transfer Tax Rebate for First-Time Home Buyers in Ontario

When you buy a property, you're changing title from one person to another, and you pay tax on that transfer as the buyer. That's land transfer tax. If you're a first-time home buyer in Ontario, you can get up to $4,000 back to cover it.

That $4,000 rebate covers you fully up to roughly $380,000 in purchase price. Past that point, you start paying land transfer tax out of pocket. If you're buying a $500,000 home, don't assume the rebate wipes out your land transfer tax bill entirely. It won't. You'll be covering some of it yourself.

30-Year Amortizations Are Now Available to First-Time Buyers

This changed in the past year. Previously, if you were a first-time buyer putting down less than 20%, meaning anywhere from 5% to 19.99% down, you were capped at a 25-year amortization. Now you can stretch that same mortgage to 30 years.

That's the sort of file-specific work we do through our mortgage services.

I cover all three of these incentives in the video below.

Savings Accounts That Work in Your Favour as a First-Time Buyer

I'm not a financial planner or a financial advisor, so please speak with somebody who has that expertise. But as a mortgage broker, I'd be doing you a disservice if I didn't mention it.

You can contribute up to $60,000 toward an RRSP for this purpose, or $120,000 as a couple. Separate from that, there's a first-time home buyer savings account where you can put in $8,000 a year. Both of these are deductible against your annual income, which will most likely lead to a larger tax return when you file.

I'd recommend both. Between the land transfer tax rebate, the amortization change, and these savings accounts, there's real money available to first-time buyers in Ontario right now.

If you're trying to figure out how these three incentives apply to your situation, feel free to reach out directly and we can go through your numbers.

Talk it through with a broker

Every file is different, and the right answer depends on your income, your timeline, and which lenders will actually work with your situation. If you want a straight read on where you stand, book a mortgage review and we will go through it together.

Linden Crain is a licensed mortgage broker (FSRA #M22004731) with Dominion Lending Centres, Elite Mortgage Group, serving Windsor-Essex and Ontario. This article is general information, not personalized financial advice. Mortgage products, rates, and qualification rules change and vary by lender and by applicant.